The £1.2bn Cornwall Pension Fund has appointed Axa Investment Managers to run a £50m liability driven investment (LDI) mandate.
Under the terms of the mandate, Axa IM will help the scheme manage its key liabilities, in particular inflation risk and interest rate risk.
Cornwall deputy head of pensions and treasury Matthew Trebilcock explained: “We decided to incorporate an LDI solution within our overall investment strategy in order to reduce the impact of volatility on council tax payers and on long-term contribution rates.”
He added: “We are very much looking forward to working closely with Axa IM, utilising their expertise and experience in this space, in the implementation of our bespoke LDI solution.”
Axa IM extended its LDI capabilities in the UK last year with the hire of Shalin Bhagwan and Lucy Barron from Legal and General Investment Management and Rodrigo Ostik who previously worked at Barclays Capital.
Local authority business development manager Tracey Milner added: “This is an important first for both the Cornwall Pension Fund and everyone in the UK institutional team at Axa IM.”
JLT Investment Consulting senior consultant Julian Brown, who advised the scheme, said while a large number of private pension funds have turned to LDI as a means of de-risking, so far only a small number of public sector funds have followed suit.
“This approach should help the Cornwall Pension Fund to reduce funding volatility and thereby provide greater future security,” he added.
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